Dr. Stanley wrote this book because the 92% of the self-made millionaires in his first book were men, and he "felt that it was indeed time for successful businesswomen of the self-made variety to be heard." Hear, hear!
It will be old news to you that women of color are underrepresented in the ranks of those who have a household net worth of between $1m and $25m (this is the level of 90%+ of the millionaires in America. Households with a higher net worth are the topic of a different blog entry on billionaire women of color. In the meantime, keep reading...).
Why I'm writing this blog is to encourage you to think long-term, to think strategically, and to think about working smarter, not harder. There are plenty of opportunities in the world for someone who has time, skill, perseverance, and vision.
There is quite literally, money on trees, if you can find the right way to build your God-given talent into a business interest that bears fruit for you. Who do you like to help? What would you do for free, because it gives you joy and satisfaction? Find some customers with whom you can share your talent. Build your business.
I recommend learning from others who have been able to make things work well. Ideally, you will seek out those who have achieved their level of wealth and success within one generation.
I highly recommend you read as much as you can about finance, management, operations, strategic thinking, and entrepreneurship, and immerse yourself in the company of people more successful than you: that's the only way you'll grow and learn. Now, let's define success. In Dr. Stanley's book, he claims a good indicator of what your net worth should be is:
Multiply your age by your income from all sources.
Then divide that number by 10 to arrive at what your net worth should be.
Quick, do the calculation!
Now do a sum of all your assets and subtract all your liabilities and that's what your current net worth is (some people don't include the equity in their homes).
Assets - liabilities = net worth
A better equation might be: how long can you live on your savings and investments if you stop working?
Do the math!
Okay.
The women profiled in Dr. Stanley's book had more than double the level of the equation above. They are "Balance Sheet Affluent" as opposed to "Income Statement Affluent" (which is where your income is high, but your expenses also are high). They are not consumer-oriented. They are values-oriented and charity/cause-oriented.
Here's the typical self-employed millionaire businesswoman:
- 49 years old, married, with children
- typically wakes up at 5:58 am and goes to sleep at 10:32pm
- works about 49 hours and 18 minutes a week
- exercises for 3.5 hours per week
- household total annual realized (taxable) income is $240,217 (median),
[this is more than five times the median for all US households] - household net worth of just under $2.9 million
- 98% are home owners. One in five has a balance under $100,000 on a mortgage.
- significantly more likely to develop a detailed accounting system for tracking all household expenditures
- research stocks to acquire, hold stocks longer, use investment advisors more, and have well-defined short- and long-term investment-return goals
- support causes by donating nearly 7% of our annual incomes
- frugal (top amount spent on a suit = $400, pair of shoes = $139, house = $299,990)
- took on a leadership role before becoming a teenager
- goal oriented (daily, weekly, monthly, yearly, lifetime)
Your typical American millionaire woman does not belong to a country club, does *not* drive a luxury car, does not live in a huge house, and does not make unplanned purchases.Your typical American millionaire woman does give generously to charity. She *does* keep track of household and business expenses. She does research investments. She *does* plan ahead.
Let's just say that it's important for your to develop your long-term goals and draw up your plans. It's important for you to consider how much you are currently earning per hour (the true cost of your work would include any commute time, any meals or outfits related to your work, and any money spent on decompressing because of stress at your work)
Dr. Stanley points out that, of all the high-income vocations in America, self employed business owners have the highest probability of becoming financially independent. In fact, those who are self-employed have about five times as much accumulated net worth as those who work for others.
The reason many of you are in business are to gain better skills, surround yourself with like-minded people in search of a common cause, and to be a better person. I challenge you to draw up a plan for where you will be in 5 years, 10 years, 25 years, and 50 years. Make sure you put the building blocks in place to reach your goals.
The typical American will change jobs at least 7 times in their working career. If you think you have skills (and you DO!) then think about who truly profits when you utilize those skills, and consider changing one of those risky W-2 jobs (where you have one client, your employer) to being a self-made woman, when you have tens, thousands, or millions of clients/customers).
Let me know what you think! Update 2006-12-06: This is one of our most popular blog posts. If you found it useful, please leave a comment below. Let us know how you intend to make your first million!
I totally agree!!! I have read SO many business books and refer back to them again and again.
Thanks for the book recommendation!
Posted by: Michelle Dunn | February 11, 2006 1:46 PM | Permalink to Comment